PT KALIMANTAN SANGGAR PUSAKA (KSP) & Subsidiaries

completed

Summary Of Project Information (SPI)Project NameIndonesia-Kalimantan Sanggar Pusaka (KSP)RegionAsiaSectorProject No004973Projected Board DateMay 15, 1996Company NamePT Kalimantan Sanggar Pusaka (KSP)Technical Partner and/or Major Shareholders Lyman Investindo (formerly the Satya Djaya Raya Group)Project Cost Including proposed IFC investment Estimated project cost is US$160 million. IFC would provide a US$20 million A Loan, a US$15 million B Loan and a US$15 million equity investment.Location of project and Description of site The project will be developed on a number of sites in West Kalimantan, Indonesia. The sites are located from 170-420 km east of the port city of Pontianak.Description of Company and Purpose of Project The Company develops and manages oil palm and rubber estates and produces crude palm oil (CPO) and rubber. The project will increase the planted area of oil palms, expand production of fresh fruit bunches (FFB) and provide the added milling capacity to process the FFB into CPO. It will also allow the Company to add value to its latex production through the construction of a crumb rubber plant. IFC will provide long-term funding with the extended grace period required by a project of such long gestation. Pursuant to the project and in cooperation with the Government of Indonesia, the Company will also complete development of over 34,000 ha of oil palm. Ownership of this land will be transferred to smallholder farmers upon maturity of the palms. This aspect of the project is expected to benefit up to 70,000 people.Environmental Category and Issues This is a category A project according to IFC''s environmental review procedure. Environmental and occupational and health issues associated with this project include land development and forest sector policy, resource recovery and air emissions, liquid effluents, solid waste management and integrated pest management. The KSP plantations are largely located within old underdeveloped transmigration schemes, and are designed to mitigate the social problems caused by the unsuccessful schemes. No virgin forest will be converted due to the project. Based on documentation supplied by KSP, the Environmental Assessment, documentation on public consultation and disclosure and site visits, it is concluded that the KSP project is being developed in full compliance with Government of Indonesia rules and regulations and World Bank policies and guidelines. The project does not involve any involuntary resettlement and the local villagers can decide independently, village by village, whether they want to participate in the development scheme. The wastewater treatment at the existing mill is designed to meet local requirements and World Bank guidelines and the effluent will be recycled for irrigation purposes. New mills will be based on the same high standard. KSP''s facilities will only produce solid waste which is all combustible in the installed boilers or biodegradable by digestion. KSP has established integrated pest management (IPM) systems at its existing plantations and these will be expanded to all plantations. KSP''s IPM includes use of nesting owls for rat control, biological control of pests and green ground coverage for weed and erosion control. IFC will ensure ongoing compliance with World Bank guidelines during the life of the project by evaluating monitoring reports submitted annually to IFC by KSP and by conducting periodic supervision.The are from the Public Information Center.Host country location of environmental documentsUniversitas Panca Bhakti, Jl. Kom Yos Sudarso, Pontianak; PT Sinar Dinamika Kapuas, Wisma William Satya, Jl. Adisucipto km5, PontianakDate SPI sent to PIC April 12, 1996For Additional Information contact: Corporate Relations Unit Telephone: (202) 473-3800Fax: (202) 676-0365Environmental documents for this project are available at http://www.ifc.org and from the World Bank InfoShop (http://www.worldbank.org/html/pic/aboutinfo.html).